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  • Student Debt Debate: The Countdown Begins

    Whitney McFadden
    AMSA National Policy Coordinator

    There is a current stalemate regarding legislation (S 2343, HR 4628) that would avoid the doubling of interest rates on federally subsidized Stafford loans for undergraduate students, set to take place on July 1 if a compromise is not reached. While both the Democratic-led Senate and the Republican-led House of Representatives have come up with fixes, they have yet to come up with a consensus about the source of funding.

    http://media.salon.com/2012/04/student_debt_final-460x307.jpg Most recently, the GOP has created a new set of proposals to offset the $6 billion cost of maintaining the interest rate reduction. One proposal plans to offset the costs of student loans by increasing the amount of money federal employees pay for their retirement. Another option has the money coming from multiple sources that include: a shorter period in which part time students are eligible for federal subsidized loans, taxes on healthcare providers that would restrict states’ ability have federally matched payments of Medicaid, and a reduction in social security overpayments. These are all unacceptable options, either limiting students education choices, decreasing already inadequate Medicaid funding from the federal government, or cutting Social Security. S 2343, Stop the Student Loan Interest Rate Hike Act of 2012, funds the interest rate by ending a tax break for S corporations, maintaining interest rates without sacrificing students, seniors, or the health care system. Senate Dems have since proposed more alternatives as well - one would raise insurance premiums on employers with underfunded pensions the other would reduce the tax reductions businesses receive for employer pension contributions. This debate is ongoing and July 1 is now just days away.

    What can you do? Take action to keep student debt low and education accessible without compromising programs that provide necessary healthcare to our communities.
    Contact your Members of Congress TODAY!

    Here are some helpful articles that give more details about the current debate:

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  • Elimination of Subsidized Stafford Loans for Graduate Students

    By Elizabeth Wiley, JD, MPH
    AMSA Vice President for Internal Affairs


    As part of the debt ceiling deal, Congress voted earlier this week to eliminate subsidized Stafford loans for graduate students. By subsidizing in-school interest, Stafford loans have made medical school more affordable for financially eligible students. The elimination of this loan program is projected to cost the average graduate student approximately $7,000. Medical students, however, will be disproportionately affected as our length of training and, therefore, the length of time during which interest accrues and capitalizes is longer than the average graduate student.

    As the cost of medical school continues to skyrocket, it is becoming increasingly more difficult for America’s best and brightest students to pursue medicine. According to the Association of American Medical Colleges (AAMC), the median annual cost of attendance at public medical schools is nearly $50,000 and more than $66,000 at private medical schools. The average medical student graduates more than $150,000 in debt.

    This “compromise” represents a blow to the financial accessibility of medical education in the U.S. In addition, when the nation is facing a primary care workforce crisis, it is becoming more difficult for many of us to afford a primary care specialty. Without an adequate pipeline, millions of Americans will be unable to obtain cost-effective preventive and primary care services.

    Shifting the costs associated with a politically-motivated debt ceiling compromise to medical students threatens medical school access and affordability. It is extremely disappointing that medical students have become caught in the political crossfire.

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